CSDDD for Non-EU Companies
Non-EU companies are directly subject to CSDDD if they generate sufficient EU turnover — €1.5B, €900M, or €450M depending on the wave. This makes CSDDD a global regulation in practical effect. US, UK, Asian, and other non-EU companies with significant European operations must understand their obligations and build compliance programmes now.
Non-EU companies are directly subject to CSDDD if they generate sufficient EU turnover — €1. CSDDD applies to non-EU companies that generate net turnover above the relevant threshold in the EU — measured at the group level across all EU member states.
Which non-EU companies are in scope
CSDDD applies to non-EU companies that generate net turnover above the relevant threshold in the EU — measured at the group level across all EU member states.
EU net turnover calculation: EU turnover includes all revenue from sales to EU-based customers, regardless of where the goods are produced or services are delivered. A US manufacturer selling products into Germany, France, and Spain would count German + French + Spanish revenues in the EU turnover threshold calculation.
Wave 1 (from 2027): Non-EU companies generating more than €1.5B in EU net turnover in the last financial year. Approximately 500–800 non-EU companies are estimated to meet this threshold.
Wave 2 (from 2028): Non-EU companies generating more than €900M in EU net turnover.
Wave 3 (from 2029): Non-EU companies generating more than €450M in EU net turnover.
Note: There is no employee threshold for non-EU companies — only the EU net turnover threshold applies. This differs from EU companies which must meet both employee AND turnover thresholds.
US companies particularly affected: The US has a large number of multinationals with significant EU operations — particularly in technology, pharmaceutical, financial services, automotive, and consumer goods sectors. Many US Fortune 500 companies will be in CSDDD scope from Wave 1 or Wave 2.
The authorised representative requirement
Non-EU companies subject to CSDDD must designate an authorised representative in an EU member state — a legal or natural person authorised to deal with the national supervisory authority on the company's behalf.
The representative's role: receive communications from the NCA; represent the company in supervisory proceedings; confirm that the company has fulfilled its CSDDD obligations; and be the point of contact for affected persons seeking to engage with the company on CSDDD matters.
Choosing the representative's member state: the representative must be established in the EU member state where the non-EU company generates the most EU net turnover — or alternatively in any member state where the company has significant EU operations. This choice determines which NCA has supervisory jurisdiction.
For US and UK companies with major EU operations: consider whether to designate the representative in Germany, France, or the Netherlands — the three largest EU economies with well-developed regulatory frameworks. The choice of jurisdiction affects which NCA supervises compliance, which national courts handle civil liability claims, and which national transposition of CSDDD applies.
Integration with existing EU presence: Many non-EU companies already have EU holding companies, EU headquarters, or EU subsidiary structures. The authorised representative can be the EU subsidiary — simplifying the corporate structure while fulfilling the CSDDD requirement.
Building a CSDDD compliance programme as a non-EU company
Non-EU companies face the same substantive CSDDD obligations as EU companies — the same due diligence requirements, transition plan obligations, grievance mechanism requirements, and civil liability exposure. The compliance programme must be equivalent.
Starting point — existing programmes: US companies subject to SEC climate rules, UK companies subject to TCFD and Modern Slavery Act, and companies complying with national due diligence laws (German LkSG, French Vigilance Law) have existing sustainability due diligence infrastructure. CSDDD requires building on and extending these programmes — not starting from scratch.
Global policy alignment: Non-EU companies should establish a global human rights and environmental due diligence policy that meets CSDDD standards — applied consistently across all global operations rather than creating EU-specific compliance silos. This reduces complexity and demonstrates genuine commitment rather than regulatory compliance theatre.
Timeline: Non-EU companies have the same implementation timelines as EU companies — Wave 1 non-EU companies must have programmes operational by 2027. Given the 18–24 month implementation period for robust programmes, Wave 1 non-EU companies should be in active implementation now.
Coordination with CSRD Wave 4: Non-EU companies meeting CSRD Wave 4 thresholds (€450M+ EU turnover, from 2029) must also comply with CSRD sustainability reporting. CSDDD and CSRD Wave 4 largely overlap for non-EU companies — build an integrated programme addressing both simultaneously.
Frequently asked questions
Does CSDDD apply to non-EU companies that only export goods to the EU without a physical EU presence?
Yes — CSDDD scope is based on EU net turnover, not physical presence in the EU. A non-EU company that exports goods to EU customers and generates turnover above the threshold is in scope regardless of whether it has EU offices, subsidiaries, or employees. The authorised representative requirement provides the EU regulatory nexus.
How does CSDDD interact with US supply chain due diligence laws?
The US Uyghur Forced Labor Prevention Act (UFLPA) requires companies to demonstrate that goods are not made with forced labour in Xinjiang for US import. CSDDD requires active due diligence to prevent forced labour in the supply chain. The obligations overlap — a robust CSDDD forced labour due diligence programme also supports UFLPA compliance. Build one programme that satisfies both.
Can non-EU companies use existing national law compliance to satisfy CSDDD?
Partially. If a non-EU company is already subject to an equivalent national due diligence law (German LkSG, French Vigilance Law, Australian Modern Slavery Act), this existing programme provides a foundation for CSDDD compliance. However, CSDDD has specific requirements — civil liability, grievance mechanism accessibility, transition plan obligations — that may exceed existing national law requirements. Gap analysis against CSDDD is essential.